One of the most significant opportunities for advisors today is helping clients manage generational wealth transfers. According to Accenture, an estimated $30 trillion in wealth will be transferred to the next generation in the United States over the next 20 years. Advisors who are prepared to guide their clients through this process, both financially and emotionally, are positioning themselves on the right side of the table, as Scott and Todd Fithian outlined in their book, The Right Side of the Table.
The principles in the book emphasize that wealth transfer isn’t just about the money. It’s about passing down values, vision, and a legacy. Advisors must focus not only on the technical aspects of wealth transfer but also on helping clients communicate their long-term goals and values to their heirs. This kind of holistic planning ensures that the next generation is not only financially prepared but also emotionally equipped to manage their inheritance responsibly.
Bridging the Generational Gap
Research shows that only 20% of heirs retain their parents’ advisor after inheriting wealth. This alarming statistic highlights the importance of fostering multigenerational relationships within client families. Advisors who help their clients engage the next generation early on in financial discussions and planning are more likely to retain those heirs as clients, ensuring long-term success for both the advisor and the family.
At Legacy, we equip advisors with strategies to initiate and manage these important conversations. We help advisors build trust with the next generation, providing training on how to create family meetings that facilitate meaningful dialogue around wealth transfer. This not only strengthens the relationship between advisor and client but also ensures continuity in the family’s financial planning.
The Role of Values in Legacy Planning
A significant part of generational wealth transfer involves educating heirs about the values that underpin their family’s financial decisions. According to a UBS Investor Watch report, 71% of wealthy parents believe that teaching their heirs about their values is more important than the wealth itself. Advisors who understand this can help families preserve their legacy, not just in financial terms, but in terms of the ideals that guided their wealth creation in the first place.
The Right Side of the Table stresses the need for advisors to act as mediators in these discussions, ensuring that the next generation is fully prepared to take over the reins. This includes helping families craft a clear and comprehensive legacy plan that transcends financial wealth and touches on their most deeply held beliefs and goals.
At Legacy, we guide advisors through this process, providing them with the tools to conduct meaningful legacy conversations and create lasting relationships that span generations. With the right approach, advisors can help their clients transfer wealth effectively and ensure their legacy endures.
